Japan's leading aluminium window maker expresses concern over volatile aluminium prices

Japan’s LIXIL Group is worried about the current developments that are taking place in the global aluminium market causing volatility in aluminium prices. The inflated prices driven by the U.S. trade actions and sanctions on United Company Rusal are creating tension in the company.  The company, according to the CEO is however not concerned about procuring the metal.

Aluminium prices had a sharp rise since the United States imposed sanctions on Rusal, one of the world’s biggest aluminium producers and suppliers.

LIXIL makes aluminium sash windows and buys about 160,000 tonnes of aluminium a year. The company expects aluminium prices to hover around 250,000 yen (US$2,289) per tonne in FY 2019 in comparison to 234,000 yen (US$2,128) a year earlier.

“We don’t expect aluminium prices to fall this year,” LIXIL CEO Kinya Seto told an earnings briefing on Monday.

“We are not worried about securing the supply as we don’t buy the metal from Rusal that much, but we are worried about volatile aluminium prices,” he added.

U.S. aluminium premiums, the extra cost paid for the physical delivery of the metal, have more than doubled since January in response to U.S. tariffs on aluminium imports. Japanese aluminium premiums for Q2 2018 rose 25 per cent from Q1 2018 to the highest in three years, to balance with the surging spot premiums in the United States.